El Paso City Council approves potential construction rebates for developers

A change to the city's infill development incentive policy -- which gives breaks to developers building in or renovating blighted or vacant areas -- will allow builders to begin construction and receive rebates later if approved by the City Council.

"Infill projects can typically be more expensive than new projects," said Mathew McElroy, director of the City Development Department. "This is a way to get underutilized land or blighted properties back into the tax rolls."

The council on Tuesday unanimously approved the amendment to its policy.

With the change, builders and developers would still need to submit an application prior to starting construction but the change now allows them to apply for rebates of planning and building fees. They would still need to qualify for the incentive and would require council approval.

Previously, those fees would be waived prior to construction starting but could not be waived if they had already been paid.

Total fee waivers or rebates cannot exceed $4,000 for affordable single-family rental housing or $10,000 for commercial, multi-family or mixed used projects in Central or South-Central El Paso. The waiver/rebate limit in other areas citywide are half those amounts.

The city adopted the incentive program in 2010 as a way to help revitalize neighborhoods with long-vacant lots or blighted buildings. The rebates are available to qualifying commercial projects and affordable rental housing and requires a minimum investment of $50,000 for commercial buildings.

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Under the program, builders and developers could qualify for property tax exemptions above the property's current value for up to five years based on the investment level.

"This is a way to grow our tax base," said city Rep. Cortney Niland, whose district includes portions of Central and South El Paso. "They help expedite infill projects that are helping fight against blight in our neighborhoods."

In a follow-up vote, the council voted 7 to 1 to approve a tax abatement package to two companies looking to open dialysis clinics on Murchison Drive in Central El Paso and Woodrow Bean Drive in the Northeast.

The builders of the Murchison 17,000-square-foot clinic, for example, would invest more than $800,000 in the project. The clinic is being built on a vacant lot whose current value is about $277,000.

City Rep. Eddie Holguin voted against the incentive, arguing that the city should not give away money to commercial developers and should instead provide tax relief to homeowners and residential renters.

McElroy said the partial and temporary tax breaks help increase the overall commercial tax rolls in areas that would otherwise continue to be vacant and blighted.

Other infill incentive projects recently approved by council include four-plex and apartment buildings in Central and the Lower Valley as well as office space in West-Central.